Credit risk associated with FX lending. Such credit risk arises, for example, when the ultimate borrower (a firm or household) contracts FX debt but its income is in local currency, so the borrower is unhedged. More stringent FX-related regulations on banks—for example higher capital requirements on FX loans—or even outright prohibition of, or limits on, loans to borrowers who cannot demonstrate a natural hedge, may be appropriate.
                这句话读不太懂， so the borrower is unhedged，是说借款人不能在外汇市场上进行对冲的意思吗？
                望高人指点一二。